Vumatel, the company that triggered the fibre-to-the-home land grab in the Johannesburg suburb of Parkhurst, has announced that its shareholders have entered into an agreement with Remgro-owned CIVH to acquire 34.9% of the company as a passive shareholder. That should mean business as usual for now, but CIVH aims to “obtain the remainder of the Vumatel shareholding” in due course.
The deal is subject to the Competition Commission’s approval, which could take anything between six and 12 months to secure, and may not succeed as Remgro owns a majority stake in another fibre company, wholesaler Dark Fibre Africa. Vumatel announced the agreement in a letter to staff on Friday, but hasn’t revealed the value of the deal.
Rumours have been doing the rounds for months that various entities have been courting Vumatel and eyeing possible acquisitions, if not of the entire business then at least of sizeable stakes in it. Rumoured suitors have included Vodacom and Remgro previously, along with suggestions the company might list on the JSE if the right deal failed to materialise.
The company says its new shareholder will benefit the business by ensuring it “has the funds to grow into an even more sustainable business” for both its staff and its customers, and that the move “takes us all one step closer to building a connected South Africa”. It adds that neither Vumatel staff nor the companies growing list of customers should expect anything to change for them in the wake of the deal.
Vumatel earlier this year announced its plans to roll out affordable connectivity (R89/month for 100Mbit/s) to informal settlements, rural areas and other under-serviced areas, not as a profit-making move but to ensure high-speed and high-quality internet isn’t only limited to those in South Africa who can afford large sums for it.